The firm is traditionally associated with its mall stores, selling everything from calculators to paperclips, but retail only makes up 10 per cent of Grand & Toy’s sales, said COO Gary D’Andrea.
The company would rather focus its efforts on the other 90 per cent, which comes from business-to-business transactions. “We’re altering our business model pretty fundamentally,” he said. “We’ve taken a good hard look at the industry and our customers’ needs.”
SMBs are faced with a cost crunch, said D’Andrea, and office equipment is coming under increased scrutiny from C-level executives. Costs can add up, he said, and companies are looking for ways to cut back.
Grand & Toy plans to target these executives directly and offer bulk rates and discounts.
For example, rather than sell a company a few chairs, Grand & Toy will offer to remodel an entire office, including all of its design and furniture needs. “It goes way beyond pens and paper and office supplies,” said D’Andrea. “The need to control these costs is becoming significant.”
Grand & Toy will also expand beyond its traditional base of office equipment and provide a broader range of services such as print imaging and Web hosting. There are also plans to help customers take care of other requirements such as matching them with an HR provider or insurance plans. Other services may be added and are currently being tested for market worthiness, said D’Andrea.
“Small businesses are very, very time crunched (and) typically they are leveraged to the hilt. They’re really looking for someone to help them take care of things that large companies take for granted,” said D’Andrea.
Vince Londini, a research analyst at London, Ont.-based Infotech Research said that Grand & Toy could find itself competing with companies that already have a foot in the door. A local HP reseller, for example, may already be servicing an SMB client for all its print requirements.
“Largely with the SMB it’s all about price,” said Londini. “It’s hard to say whether Grand & Toy is going to be competitive.”
However, there are plenty of SMBs that are looking for help.
“There is a market for that kind of hosting and services. A lot of IT shops are saying, ‘Why are we doing this when we can get this cheaper elsewhere?’”
Ted Mallett, vice-president of research for the Toronto-based Canadian Federation of Business said he’s glad that Grand & Toy is demonstrating an interest in the SMB market.
“I think there are lots of organizations interested in the SMB market and we certainly encourage them,” he said. However, “it’s not an easy thing. Not everyone can get it right.”
Grand & Toy currently operates 47 stores in Canada, many of them in mall locations. D’Andrea said those will be eventually closed down and relocated to more business-friendly locations like industrial parks or office towers.